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Congress Finally Acts on Tax Benefit Extenders

One Year Extension Through 2014 To Save Millions

As the “lame duck” session approaches an end, Congress is finally taking action to address the dozens of tax benefits that expired at the end of 2013. The House recently passed the Tax Increase Protection Act (TIPA) of 2014 that includes a one-year extension of these benefits to the end of 2014. The Senate is expected to take an up-or-down vote shortly, and President Obama has already signaled his willingness to sign the Bill as soon as it hits his desk.

Among the many tax benefits to be extended include:

Reinstatement of the Section 179 deduction for equipment purchases of up to $500,000. Without the extension, the limit for 2014 was only going to be $25,000.

Reinstatement of the 50% bonus depreciation deduction for the purchase of brand new equipment.

The $250 “above-the-line” deduction for teacher expenses in the classroom, and the “above-the-line deduction for qualified tuition expenses.

Tax-free IRA distributions made for charitable purposes for taxpayers 70 ½ or older.

The IRS had previously warned Congress about the potential delay in processing 2014 income tax returns, if they did not take prompt action to address these extended tax benefits. We’ll have to wait and see if this late action does cause a delay, as it has the past two years. Unfortunately, this late action gives taxpayers little or no time to react and take advantage. We are hopeful the next Congress will take early action to decide which of these tax provisions will become permanent, so that taxpayers can begin to plan accordingly.

Call us today to find out how all this could affect you and your business!